Why Elf Beauty is banking big on Rhode, Hailey Bieber's fan-favourite brand
A Rhode pop-up sells products from the beauty brand founded by Hailey Bieber, the fashion model, entrepreneur and wife of pop star Justin Bieber, in New York. Photo: The New York Times
Rhode, the upstart beauty brand founded by fashion model and entrepreneur Hailey Bieber, has been acquired by Elf Beauty for US$800mil (approximately RM3.4bil) in cash and stock, an eye-popping sum for a line of blushes and lip glosses that's not yet three years old.
In an industry crowded with other celebrity-fronted beauty brands, Rhode has experienced rapid growth, which many attribute to Hailey's considerable influence on social media.
Hailey, a daughter of actor Stephen Baldwin and the wife of pop star Justin Bieber, has 55 million followers on Instagram and 15 million on TikTok.
'Rhode has seen exponential growth over the past three years because of deliberate decisions and best-in-class marketing and community building,' Hailey said in a statement.
'To continue to grow strategically, we need the partnership of Elf. Beauty to fuel innovation and global expansion.'
On top of the guaranteed US$800mil (RM3.4bil) payout, the Elf deal, which was announced Wednesday (May 28), includes the potential for an additional US$200mil (RM850mil), contingent on Rhode's growth over the next three years.
Rhode, which Hailey founded with Lauren and Michael D Ratner, reported net sales of US$212mil (RM901mil) in the year that ended March 31.
Read more: Hailey Bieber, known for setting beauty trends, may sell her makeup brand Rhode
According to Tarang Amin, the CEO of Elf Beauty, the acquisition had been in the works since October.
Amin said he was eager to close on it to marry the Generation Alpha fans Hailey has pulled in with the Millennials and Gen Z consumers whom Elf has traditionally relied on.
The expansion includes a partnership with Sephora that will bring Rhode products to physical stores for the first time since the brand's debut.
But even without a consistent presence in brick-and-mortar shops, Rhode had built a fan base that Amin found impressive.
'I have not seen another brand where there are communities waiting, or a pop-up event in LA (Los Angeles), willing to camp out overnight for 14 hours in line – not just for product, but to buy into the entire lifestyle,' Amin said in a video interview Thursday (May 29).
Last summer, hundreds waited in line in New York to experience the Rhode pop-up – and possibly get a glimpse of Hailey – in a SoHo storefront.
Amin said he admired Rhode's ability to 'engage and entertain' its customer base.
Compared with Elf, he added: 'They skew younger, but their level of engagement is what really appeals to me.'
As part of the deal, Hailey will stay on at Rhode as the brand's chief creative officer, and she will serve as a strategic adviser to both companies.
Korinne Wolfmeyer, a senior research analyst at investment bank Piper Sandler who specialises in the beauty and wellness markets, believes that Hailey's ability to translate her connection with her fans into sales is what most aligns with Elf's strategic priorities.
Read more: 'I want to be everywhere possible': Hailey Bieber plans on beauty world takeover
'It seems like they really appreciate the way Hailey connects with her followers and her community,' Wolfmeyer said.
'They view it as a similar path as Elf, using that consumer connection to really drive the performance.'
While celebrity brands like Kylie Jenner's Kylie Cosmetics and Selena Gomez's Rare Beauty have proved to be significant players in the cosmetics industry, Hailey's fame may not be the biggest attraction for Elf Beauty.
Celebrities bring a lot of reputational and trend risk, and companies are usually wary of how much they invest in their brands, Wolfmeyer said.
But unlike other beauty companies, Rhode also veers into wellness, marketing many of its products with claims that they promote skin health.
'Rhode was maybe one of the earlier movers in that category,' Wolfmeyer said.
'There is obviously a lot of white-space potential, and it does resonate with the younger consumers. I think that's very appealing.' – ©2025 The New York Times Company
This article originally appeared in The New York Times.
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